Cancellation rules now a headache for state commissioners

Decisions about whether to let consumers keep individual health policies that violate the new federal coverage rules are now in the hands of state insurance commissioners. And a handful of them are not happy about it.

"Now the state insurance commissioners and the insurance companies are going to look like the bad guys, not the president," Christopher Condeluci, a former Senate Finance Committee tax counsel who is now a benefits compliance lawyer at Venable, said Friday in an interview.

President Obama announced Thursday that the administration wants to let individuals keep some non-grandfathered policies that violate Patient Protection and Affordable Care Act quality standards.

An administration official told state commissioners in a letter that the U.S. Department of Health and Human Services will not consider a carrier to be out of compliance with PPACA if it lets an individual or small group renew a policy that was in force Oct. 1 any time between Jan. 1, 2014, and Oct. 31, 2014.

The wording of the letter means that commissioners will have to decide what the rules will be in their states, Condeluci explained.

Commissioners seem to be divided on the new rule.

Jim Donelon, president of the National Association of Insurance Commissioners, said he opposes the move and believes that changing the rules will throw off carriers' actuarial projections.

The list of commissioners siding with Donelon includes both PPACA opponents, such as John Doak of Oklahoma, and PPACA supporters, including William White of the District of Columbia, Monica Lindeen of Montana and Mike Kreidler of Washington state.

Commissioners in Alaska, Colorado, Connecticut, Florida, Nevada, North Carolina and South Dakota have said they are still reviewing the proposal or have not made a decision about it.

Officials in Arkansas, California, Mississippi and Vermont have said that their states have already put similar rules into place.

In California, for example, Dave Jones has been fighting Covered California exchange efforts to have carriers cancel all pre-PPACA individual policies by the end of 2013.

Officials in Arkansas and Vermont said their states already have taken steps to ensure that insurers could keep current individual policies in place until the end of 2014.

In Pennsylvania, Tom Corbett said HHS should make a broader effort to let consumers keep their policies.